The unemployment rate is a measure of the prevalence of unemployment and it is calculated as a percentage by dividing the number of unemployed individuals by all individuals currently in the labour force. During periods of recession, an economy usually experiences a relatively high unemployment rate.

High and persistent unemployment, in which economic inequality increases, has a negative effect on subsequent long-run economic growth. Unemployment can harm growth not only because it is a waste of resources, but also because it generates income redistribution pressures and subsequent distortions, drives people to poverty, constrains cash liquidity limiting labour mobility, and erodes self-esteem promoting social disturbance, unrest and conflict. Prominent economists have said that rising inequality is however the most important problem.